2005 (1) TMI 553

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....ufacture and removal of excisable goods. 2. We heard Shri N. Venkatraman, learned Advocate for all the appellants and Mrs. R. Bhagya Devi, learned SDR for Revenue. The learned Advocate mentioned that M/s. Vasu Chemicals, Appellant No. 1, manufacture polishing compound bars, namely, yellow bars, the cheaper variety and green bars, the costlier variety for stainless steel vessels; that the entire case of the Department is on the basis of the fact that there are two other business premises in the name of Ashok Traders and Columbus Traders within the premises of Appellant No. 1, who purchase aluminium hydrate and calcined alumina from recognised sources and divert the same to the Appellant No. 1 for production of polishing bars. He submit....

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....ed the receipt of goods manufactured by them without payment of duty; that but they have admitted the receipt of yellow and green bars in the ratio of 5:1; that the stock available on the date along with the quantities despatched on the previous day confirms that the production has been in the ratio of 5:1; that the figure found in the diary and the ledger extracts of dealers also confirm the fact that sales had been effected by the Appellant No. 1 only in the ratio of 5:1; that in these circumstances the finding in the impugned order that the quantities of yellow and green bars produced were not in 5:1 ratio is contrary to facts; that even during the investigation, the dealers have confirmed that purchases had been made by them in the rati....

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....at they had this facility available with them. The Commissioner has upheld the charge prior to January, 1995 on the ground that the material is available to show transportation of green bars to Madras and, therefore, the Appellant No. 1 could have manufactured calcined alumina out of aluminium hydrate by using alternate source of energy, i.e. "Generating set/diesel engine". But the Revenue has not adduced any material or evidence to show that the Appellant No. 1 had generating set/diesel engine of the capacity to convert aluminium hydrate into calcined alumina. The charge of clandestine manufacture and removal of goods cannot be sustained on the basis of assumptions and presumptions as held by the Supreme Court in the case of Oudh Sagar Ltd....